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Setting up a CFO Trust Fund

Forging a bond with your director of finance will reap rewards for your institution -- and your department.

By Dian Schaffhauser

02/16/11

Robert "Chip" German distinctly remembers how intimidated he felt when the Millersville University(PA) CFO interviewed him for the school's top IT job in 2008. Over lunch, Roger Bruszewski, the vice president of finance and administration, looked across the table at him and asked, "Do you play golf?" German, who wouldn't know a Big Bertha if it clubbed him in the head, thought, "I'm in trouble now."

Despite his lack of plaid pants, German still got the job as VP of information resources. Golf, it turns out, was simply representative of the kind of easy camaraderie that the CFO and the rest of the university cabinet fostered across the board. Three years later, listening to German and Bruszewski talk about the CIO-CFO relationship is like tuning in as two longtime friends recount their college days together -- with continual interruptions, friendly teasing, and outward expressions of mutual respect.

While it would be naïve to think that every CIO can achieve such a rapport with his CFO, understanding the importance of a solid relationship with the head of finance is critical to success, both for the IT department and the institution as a whole. Never has this been truer than in today's bleak economy, as CFOs become increasingly cautious about initiatives that involve significant expense, yet information technology can help achieve efficiencies that will improve the bottom line.

The good news is that forging a productive relationship with the CFO doesn't require speaking in accounting jargon (although having an understanding of finance helps); it doesn't depend on continually proving your technology prowess; it doesn't even require you to learn golf. What it does call for is building a bond of trust and honesty with your counterpart -- or superior -- sometimes at the expense of your own ego.

Stand by Me

According to North Shore Community College (MA) CIO Gary Ham and VP of Finance Janice Forsstrom, ensuring a successful relationship between the CFO and CIO calls for each partner to deliver specific forms of support.

The CIO needs from the CFO:

High-level understanding of core technologies and underlying complexities to set realistic expectations and discuss strategic options

A complete analysis of new initiatives that encompasses costs, ROI, return on value, options, issues, and potential pitfalls

A proactive approach to communications with others in the institution and use of governance structures to gain consensus

Realistic assessment of current IT skills and steps to filling the skills gap

A business and entrepreneurial mentality

Look Beyond IT For Bruszewski and German, working well together begins with this fundamental truth: They're officers of the university first and heads of specific divisions second. "We have to be worried about all aspects of the campus," Bruszewski explains. "For instance, we're in the process of having a conversation about transforming the institution over the next 10 years. We've probably had more conversations on that topic in the last three months than we've had on finance and IT. We usually don't talk about the technology; we talk about the strategic impact on the institution."

It doesn't hurt that Bruszewski was formerly a CIO, and German himself has a background as a chief of staff at the University of Virginia. By holding positions outside their current niches, they gained exposure to institution-wide issues. So vital does German consider the value of such cross-department experience that he actively seeks opportunities for his own staff members to work on university-wide projects. "That gives them the opportunity to develop empathy for all the other areas of the institution early on and repeatedly," he notes. "It's a real success factor for how they will build relationships in the institution going forward."

Moving up the traditional career ladder within a single, specialized area can lead to narrow-mindedness, German believes. "The best diagnostic indicator of that trap is when somebody blames some other section of the university for something they're not able to do," he notes. "People who have had university-wide experience generally recognize that it's a shared responsibility. Pointing fingers of blame is usually covering up some other problem."

Millersville Universitymillersville.edu Millersville, PA 8,800 students Reporting line: VPs for information resources and finance report to president Latest conversation between CIO and CFO: Dealing with the challenges of the budget shortfall

Working off the Same PlaybookNorth Shore Community College (MA) decided that the best way to avoid departmental myopia was to have everyone use the same playbook. The school doesn't have a separate technology plan -- IT is simply part of the college's overall strategic plan.

It's an approach that has worked well for Janice Forsstrom, North Shore's VP of administration and finance, and CIO Gary Ham. When technology is part of a solution that will move the college closer to achieving its objectives, Forsstrom pushes it within the president's cabinet, while Ham sells it within the IT governance committee, which has representation among multiple campus constituencies.

"Gary is excellent with really helping me to understand the technical details and how a particular technology is going to make a change," says Forsstrom. "So it's not technology for its own sake, but how it all fits together."

Ham has helped in that effort by bringing an understanding of financial issues to discussions. "He's not a finance person as such," says Forsstrom, "but he understands the big picture and understands that he has to help me make the case for the investment."

Ham is actually a hired gun, employed by the college from SunGard Higher Education's Technology Management Services (see "Outsourcing the CIO"). His job is not a short-term position; he's been in his current role at North Shore for 12 years -- even longer than Forsstrom has been CFO.

The relationship that Forsstrom and Ham forged at North Shore began when the institution needed to do a major overhaul of its administrative systems, including how students registered and paid for classes, as well as the implementation of a campus portal and web-based student self-services. It was Ham who came up with the idea of making the pilot program "like Disneyland," recalls Forsstrom, where students move as groups through a quick training process to learn how to register via self-service. The pilot was so successful, Ham says, "we really made that official for the next semester." Sixty percent of students used the self-service route after it had officially gone live.

Battle of the Budget If the CIO and CFO aren't on the same page, nothing exposes that rift more quickly than budget time. Instead of the CIO and CFO working together toward a shared vision, their interactions quickly degenerate into nothing but sparring over dollars and cents. "I've seen IT officers do this quite a bit," says Millersville's German. "They immediately get into a defensive ‘I'm-going-to-protect-my-turf-at-all-costs-possible' posture. They do so by creating elaborate justifications on ROI and value propositions and that kind of stuff."

What that looks like to the CFO, adds Bruszewski, is overselling: "The CIO comes with an idea. In order to get support from the CFO, he oversells the concept. He says, ‘I can do it for this much money. I can do it in this short time. We're going to see this return on investment.' As CFO, I don't even ask for ROI anymore. [Projects] never come out the way you think they're going to come out. Then, all of a sudden, you're 20 percent over budget, 30 percent over time. All the offices are frustrated. And the trust factor goes out the window."

The reverse side of the trust problem occurs when a CIO comes up with a good plan and the CFO underfunds it because "he thinks you don't need that much," says Bruszewski.

North Shore Community Collegenorthshore.edu Danvers, MA 8,500 students Reporting line: CIO reports to VP of finance Latest conversation between CIO and CFO: Discussion about projects for the 2010-2011 year

Coordinating Strategic Planning The solution, both Millersville officials agree, is to do their strategic thinking together. All too often, says Bruszewski, the CIO and CFO do their planning separately "and then they try to bring their ideas together, and it's really hard. The difference with Chip and me is that we try to do the tactics and strategies early on so we have no surprises."

For a recent project, the two men and members of their staffs spent a year reviewing all printing and copying on campus. As a result of that joint analysis, the university changed how its print shop operated, how printing was managed in student labs, and even what copiers were used. "We've actually yielded a better return on investment than we thought," says Bruszewski.

The success of projects such as these, he adds, stems "from having mutual respect for each other -- not setting your sights too high or too low, and working through the difficult issues. What's happened in other institutions where I've been is that, all of a sudden, the project starts going bad. Rather than the two individuals working it out, one tries to either hide or change it or maneuver it in such a way that it usually just ends up going wrong."

"We don't hide stuff from each other," says German. "Roger is a very open leader. He will always tell me everything he can tell me. There are some limits on that and I respect those limits. But he doesn't withhold things. He just gives me the whole story. And I try to do the same thing with him."

Not everything is sunshine and daffodils, though. Disagreements do surface. The vice presidents recently argued in a cabinet meeting over what to do with social media and the university's web presence. "We both agree on the end," says Bruszewski. "We just can't agree on how to get there yet. But it's not about him losing and me winning. We'll figure it out."

It Takes Two to Tango One lesson that all the interviewees stress is that a partnership requires two players. Even if the CIO is doing everything possible to forge a productive relationship, it will all come to naught if the CFO is solely interested in the bottom line.

At North Shore, Ham credits much of his success to Forsstrom's willingness to take the time to understand the nuances of complex technology projects. "I worked for a CFO at another college and we had a completely different relationship," explains Ham. "That person wasn't willing to spend the time to look past the dollars and cents. Jan's very good at listening to the obstacles and really understanding the issues."

Forsstrom's willingness to look beyond the immediate fiscal budget served North Shore well when all of the colleges in the Massachusetts Department of Higher Education had to address new PCI mandates, and many institutions needed to move to external companies for their internal payment gateways. Three companies were in the running. The obvious choice was the one that would cost the least, even though it didn't fully address new service improvements, including single sign-on. Ham and a small team, including reps from student accounts and financial aid, met with each vendor. Then they sat down and analyzed all costs associated with running the business.

"Lo and behold," says Ham, "the solution that was best for us was from a company whose costs at face value in year one were much higher -- $30,000 more than the other solutions." That choice resulted in four new services, such as single sign-on, elimination of paper bills, and the addition of third-party payment functionality. And, from a fiscal standpoint, costs were actually less after year two.

"Gary is very, very good at homing in on what is a good value for the business of the institution, which is education, and not just saving money," Forsstrom says. "It's an investment for the future of our business, which is teaching and learning."

Outsourcing the CIO

Smaller colleges often turn to CIO outsourcing in situations where they can't afford to hire the level of talent they want. According to SunGard Higher Education, the CIOs the company places at institutions go through rigorous qualification steps, including testing, to ensure they're the right fit. In the online-only feature, "College CIO-for-Hire," CT explores the advantages of working with an outsourced CIO.

Partnering to Ease the Pain Sometimes, though, the CFO has no choice but to take out the knife and start cutting. It is at times like these that an institution is well served by a CIO and CFO that can work in partnership. At North Shore, for example, Ham worked with Forsstrom to develop an institutional survey to solicit ideas from all over the campus for how to increase revenues, achieve cost savings, and offer services across departments to help each other.

And then, when hiring was frozen and IT lost its director of networking, among other positions, Ham didn't complain. He simply stepped into that particular role and reorganized other jobs to continue delivering the services needed by the college. "It has been a difficult time," Forsstrom points out. "And they have done a remarkable job."

It's a similar story at Millersville University. During the most recent economic downturn, when some operational budgets were cut by 10 percent and equipment budgets by 50 percent, both Bruszewski and German exceeded the cuts needed within their specific organizations to help meet the university's overall goals. "We were both deeply concerned about how we were spending our equipment budget to make sure we weren't reducing the quality of our academic instruction. I think that's what we worried about more than anything," says Bruszewski.

Looking beyond his own department, the financial VP expressed his worry about German's ability to maintain delivery of services, especially since IT was losing some positions. "In one particular case dealing with my office, [we] agreed to pick up some of the work, so he could move resources to other places," explains Bruszewski.

For his part, German says that earlier in his career he would have fought some of the cuts that he proposed to Bruszewski this time around. His change in attitude, he says, "comes from having a wider institutional view and recognizing that, while it may be painful for me, it would be more painful for it to come from other areas. So it's time for me to put up."

"It's about being a team," adds Bruszewski.

Check Your Ego at the Door As the rapport between dynamic duos such as German and Bruszewski or Ham and Forsstrom demonstrates, a culture of trust proves its value in times ordinary and difficult.

"If a CIO is defining success at the expense of the CFO or any other officer of the institution, that's a recipe for a failed relationship," explains Millersville's German. "But if that person defines success as, ‘I'm doubly successful when the CFO is successful,' then he's just indicated an investment in the CFO's success that's going to be a core element of the trust between them."

That sense of trust permeates the entire university cabinet, according to Bruszewski. "We're all seasoned," he says. "My ego went a long time ago. I've been doing this so long I don't have an ego anymore."

Ultimately, however, specific individuals must define the relationship they have with each other. In the case of the CIO working with or for the CFO, common humanity will trump even the most dazzling technology every time.

"I'm the CFO," North Shore's Forsstrom concludes. "The demands are reduced funding, increased accountability, better performance, higher expectations for customer service, being competitive, looking at costs, and looking at better service. I look to the IT department to help with all of that. IT has come through. Why would I not be supportive?"